GOVERNMENT RATES AND THRESHOLDS FOR EMPLOYERS

(06/04/2017 - 05/04/2018)

Tax and National Insurance Thresholds


Category NameDescriptionGross Amount
Lower Earnings Limit (LEL) If you pay your employee below this amount they will not be entitled to any state pensions or benefits. If this is the employee's only job you are not required to register with HMRC. £113 per week or less
£490 per month or less
£5,876 per year or less
Group between the LEL and National Insurance ThresholdIf you pay your employee between these amounts and it is their only job you will not pay tax or national insurance. The employee will be entitled to state pension and benefits. You are required to register with HMRC. £113 up to £157 per week
£490 up to £680 per month
£5,876 up to £8,164 per year
Primary and Secondary Thresholds If you pay your employee this amount, tax and employee's national insurance must be deducted and paid to HMRC along with employer's national insurance. National insurance contributions will vary depending on whether the amount is within the primary or secondary threshold. You are required to register with HMRC. £157 up to £866 per week
£680 up to £3,750 per month
£8,164 per year
Employee Personal Allowance This is the amount set by the government each tax year that the employee can earn before they start paying tax. This tax year the standard code is 1150L. £221 per week
£958 per month
£11,500 per year
Upper Secondary, Apprentice Upper Secondary and Upper Earnings Limit ThresholdsIf you pay your employee this amount, tax and employee's national insurance must be deducted and paid to HMRC along with employer's national insurance. National insurance contributions will vary depending on each category. You are required to register with HMRC. £866 or more per week
£3,750 or more per month
£45,000 or more per year


For further information on Threshold Rates please follow the link: Threshold Rates

Payment Due Dates for Tax and National Insurance


Quarterly payments are due to HMRC by the: 19th July 2017, 19th October 2017, 19th January 2018 and 19th April 2018. If your monthly liability bill exceeds £1500 per month you are required to pay HMRC on a monthly basis.

To pay HMRC please follow this link:

National Minimum Wage (NMW)


The rates below apply from 1st April 2017.
Category of WorkerGross per Hour Rate
Aged 25 and above (national living wage rate)£7.50
Aged 21 to 24 inclusive£7.05
Aged 18 to 20 inclusive£5.60
Aged under 18 (but above compulsory school leaving age)£4.05
Apprentices aged under 19 or over but in the first year of their apprenticeship£3.50


Accommodation Offset Rate


For employers who provide separate accommodation for their employees there is an allowance of £44.80 gross per week (£6.40 per day,) this can be offset against the NMW.

Statutory Maternity Pay (SMP)


The standard rate from April 2017 is £140.98
Small Employers can recover 100 % of the Gross SMP plus 3% compensation.

SMP is paid at:
  • First 6 Weeks - 90% of the employee's average weekly earnings with no upper limit.
  • Remaining 33 Weeks - Standard rate or a rate equal to 90% of the average weekly earnings whichever is lower.

For further information please follow the link: SMP

Way2paye automatically assist clients and place claims for SMP.

Statutory Sick Pay (SSP)


The current rate of SSP is £89.35 gross per week. This is a direct cost to Employers and can no longer be claimed back from HMRC.
For further information please follow the link: SSP

Student Loan Recovery


If your employee has a student loan you will be required to deduct it from their gross pay. The employee will start to pay their loan when they earn over the threshold for each plan depending on which one applies to them.

Plan 1
Is for English and Welsh students who started before 1st September 2012 and all Scottish and Northern Irish students
Threshold Amount
£341 per week
£1,481 per month
£17,775 per year
Plan 2
Is for English and Welsh students who started on or after 1st September 2012.
Threshold Amount
£403 per week
£1,750 per month
£21,000 per year
Student loan deductions for both plans:9% is paid back over threshold.

For further information please follow the link: Student Loan Recovery

Mileage Allowance


If your employee uses their car for work purposes, excluding their commute, you can pay your employee 45p per mile for the first 10,000 miles and then 25p for each subsequent mile without having to report them to HMRC.

Redundancy Pay Entitlement


Aged 22 or less0.5 week's pay for each full year or £244.50; whichever is lower
Aged 22 up to 411 week's pay for each full year or £489; whichever is lower
Aged 41 or more1.5 week's pay for each full year or £733.50; whichever is lower


If you make your employee redundant you must pay them redundancy pay if they have worked for you for 2 years or more.

Way2paye will assist their clients with any of the above to ensure accurate amounts are calculated for them.




Share This Page